Self-employment - WTC terminated due to lack of turnover

Hammyman

staffsuk wrote: »

My misunderstanding there, apologies & thanks

No worries. Its sometimes not easy to work out what people mean when its just written text.

bestpud

saving-mad wrote: »

yes sadly i am one of the innocent ones:(, we have had some tax credits for a long time, my expenses as a childminder outweigh my income but i work 60 hours a week, so now on top of looking after 3 small children all day, having 2 children of my own with additional needs now i have to go through a review.

I am, not too worried as i know its just to weed out the ones that shouldn't be claiming.

:rotfl: You are joking... ? :rotfl:

saving-mad wrote: »

there is money in it, but the allowable expenses are such that it doesnt show much on paper, i have a good accountant who knows the rules well,
the reward of seeing the children develop far outweights any money you
could earn and i am here for my 2 when they need a day off due to there disabillities, no employer would want to employ me as i would need too much time off.

There are lots of parents who would love to stay at home and see their children develop, but they have to work to keep a roof over their head.

But you claim benefits for the joy of watching someone else's children develop?

Good grief!!! If you cannot work because your children need constant care, then there is benefits for that. It's just wrong to milk another benefit on top!!

These reforms are well overdue!!

First we have well off families raking in hundreds for child care and then we have the child minders raking in money because they can't make a profit from the payments!!

Mad, just mad!!! :eek:

pipscot

Sixer wrote: »

I don't think it will be quite that simple. There won't be any hours thresholds with UC - so no 16 or 24 hours minimum or premium for 30 hours as now. So quite how they are going to assume a notional minimum of NMW for self-employed people I'm not sure. Claimants will presumably have to self-declare hours for that?

It seems that if people declare low hours so that their expected "assumed income" is low enough for universal credits, they will then be subject to the conditionality rules meaning that they will need to be applying for other jobs etc

And if they declare enough hours to keep them out of the conditionality rules then they will be assumed to be making a reasonable profit that fits those hours.

melly1980

MissMoneypenny wrote: »

So you show a loss on your books so that you can claim maximum welfare?.

You need to read.

She is accounting for LEGITIMATE ALLOWABLE EXPENSES as per the guidance of the IR.

melly1980

DaisyFlower wrote: »

Tax credits are supposed to be to help people on low incomes, not those who get clever with accountants and report the bare minimum in order to gain other tax payers money.

Funny how its acceptable for those in suits at the top end to do it though.

I will point out the facts again, as a childminder (of which my wife is one, so I should know) you can offset certain house costs and other expenses LEGITEMATELY as per guidance from the IR. This is no different than any other business who would factor in gas, elecricity, materials, insurance and premesis costs. It is not, as you describe, some sharp practice. Childminders, in particular ones that have kids and only pick up spot business, only make smallish amounts of money.

Hammyman

melly1980 wrote: »

Funny how its acceptable for those in suits at the top end to do it though.

I will point out the facts again, as a childminder (of which my wife is one, so I should know) you can offset certain house costs and other expenses LEGITEMATELY as per guidance from the IR. This is no different than any other business who would factor in gas, elecricity, materials, insurance and premesis costs. It is not, as you describe, some sharp practice. Childminders, in particular ones that have kids and only pick up spot business, only make smallish amounts of money.

Yes it is different. As the room is shared use and not used solely for the business, i.e it reverts to being your living room once the "darlings" have gone home, you can only claim a flat annual amount and not a percentage of the mortgage interest/rent, electric and gas as you could if it was solely used for that purpose. OTTOMH that fee was not a large amount - a couple of hundred quid.

Hammyman

melly1980 wrote: »

You need to read.

She is accounting for LEGITIMATE ALLOWABLE EXPENSES as per the guidance of the IR.

I think she may have a problem claiming they're wholly legitimate if she is also looking after her own children. For example if she takes them out for a visit somewhere and she has one clients child and two of her own with her, HMRC would not look favourably on claims for mileage allowance for more than 1/3 of the total.

HappyMJ

Hammyman wrote: »

Yes it is different. As the room is shared use and not used solely for the business, i.e it reverts to being your living room once the "darlings" have gone home, you can only claim a flat annual amount and not a percentage of the mortgage interest/rent, electric and gas as you could if it was solely used for that purpose. OTTOMH that fee was not a large amount - a couple of hundred quid.

Sorry to correct you but it is a percentage and that percentage is quite high. If I were a CM then my expenses claim would exceed £2000.

http://www.hmrc.gov.uk/manuals/bimmanual/bim52751.htm

HappyMJ

Hammyman wrote: »

I think she may have a problem claiming they're wholly legitimate if she is also looking after her own children. For example if she takes them out for a visit somewhere and she has one clients child and two of her own with her, HMRC would not look favourably on claims for mileage allowance for more than 1/3 of the total.

You claim the entire 45p per mile you do not need to apportion it based on how many children you are carrying. If you have a HMRC link proving otherwise please post it.

I'll give you a link... http://www.hmrc.gov.uk/manuals/bimmanual/BIM37600.htm

It says...There is nothing in ICTA88/S74 (1)(a) about apportioning expenditure; for example allowing the ‘trade proportion’. On the face of things the statutory test is all or nothing.

Childminders do not earn profits. I think this thread is getting a bit off topic trying to catch out the OP where no profit exists and will never exist. The OP charges £2.70 per hour per child. The market rate around here is up to £3.50 per hour per child. You don't need an accountant to reduce that income to a NIL profit.

alfiesmum

melly1980 wrote: »

Funny how its acceptable for those in suits at the top end to do it though.

I will point out the facts again, as a childminder (of which my wife is one, so I should know) you can offset certain house costs and other expenses LEGITEMATELY as per guidance from the IR. This is no different than any other business who would factor in gas, elecricity, materials, insurance and premesis costs. It is not, as you describe, some sharp practice. Childminders, in particular ones that have kids and only pick up spot business, only make smallish amounts of money.

Don't you believe it. I was a childminder for 9 years. Good money and very enjoyable. Until one of the kids comes up to you years later and says 'hello you used to look after me' - and they're a 6ft hairy a*sed policeman. That's when you know you're old!

I don't have a problem with anyone running a small business doing so within the tax rules to maximise their own income however. They're not taking money out of my bank account are they. Bothers me a bit that they come across as the local 'dial a saint' for working parents though. You're doing a job, you're being paid, nice one.